Just my opinion of course, but this thing just keeps getting scarier and scarier and indications are that the worst news may be yet to come, especially for the thrifts and mortgagers . A sector to avoid for those who want to sleep at night and not wake up to the likes of today's news and resultant action in WAMU and FNM.
Tuesday, December 11, 2007
A good time to buy the financials
Just my opinion of course, but this thing just keeps getting scarier and scarier and indications are that the worst news may be yet to come, especially for the thrifts and mortgagers . A sector to avoid for those who want to sleep at night and not wake up to the likes of today's news and resultant action in WAMU and FNM.
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3 comments:
While I usually don't dumpster dive for stocks, I am in strong agreement here. I am buying up lots of WM this morning, thinking that most of the bad news and bottom is likely behind us -- and there is a lot more room to the upside than the downside.
WM might also make for an interesting ratio write, with an IV of 75 on the 20s.
Cheers,
-Bill
Bill, My apologies, but you completely misunderstood my facetious post. My intent was to suggest steering way clear of the financials while awaiting the next round of confessions that may depress the sector even further. I should have put a question mark after the title line.
I hear you -- the second time around, anyway.
FWIW, I thought maybe this was a contrarian 'when pigs fly' market call, but I must have read what I wanted to see. In any event, I should have listened, as I managed to turn what started out as a good WM trade into a losing one. I knew enough not to bet on the financials ahead of the Fed, but I thought I was getting fairly good odds.
FWIW, I am inclined to think most of the damage to the financial stocks has been done: XLF and $XBD are still a good deal above the old lows. We will still see a lot of ugly headlines ahead, but investors are becoming desensitized to a good deal of that. It may still be awhile, however, before we know what the underlying fundamentals are.
Disclosure: long flying pigs and short reading comprehension.
Cheers,
-Bill
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